My guess is Amazon wants to rope people into their ecosystem, and they've recognized that many startups have opted for the cheaper VPS providers in their bootstrap days.
This is an intriguing move and one that I'm sure DigitalOcean, Linode, and Vultr have been fearing may happen.
The pricing is on par with these alternatives in the VPS space.
A lot of people, myself included, don't seriously consider Linode anymore given their security problems (March 2012, 2013) and infrastructure problems (Dec-Jan 2015-16).
This is an intriguing move and one that I'm sure DigitalOcean, Linode, and Vultr have been fearing may happen.
The pricing is on par with these alternatives in the VPS space.